CSM reports dissappointing first half results
CSM Biochemicals saw a sharp decrease in its operating result due to price pressure in the North American market and negative currency effects (US dollar, amongst others).
31/08/05 Dutch giant CSM has seen profits fall more than expected in the first half of this year from 44.3 million in the first half of last year to 34.9 million euros this year. CSM reported disappointing results for CSM Bakery Supplies Europe, mainly because of sluggish business developments at BakeMark UK and Délices de la Tour (France). CSM Biochemicals saw a sharp decrease in its operating result due to price pressure in the North American market and negative currency effects (US dollar, amongst others). CSM Bakery Supplies North America improved its operating result before exceptional items (in US dollars) by 12% thanks, amongst others, to the successful reorganization of the distribution activities and the integration of Henry&Henry into H.C. Brill.
Gerard Hoetmer, CEO said that the company is still pressing ahead in order to improve margins. A new cost-cutting program for 2005-2007 will enable the company to generate total annual savings of EUR 110 million as of 2008, he said. At the same time, the company will spend about EUR 30 million on sales, marketing, and R&D. Another EUR 30 million will be invested every year to bolster our competitive position. He said that the restructuring program will lead to an annual operating result improvement of EUR 50 million as of 2008. “We see 2005 as a year of transition. Market conditions are difficult. Lower operational results and exceptional charges arising from reorganizations put pressure on the result”, Hoetmer said.
The poor results were corresponded with the news that Roelof Hendriks will step down as head of finance at CSM. Hendriks had been seen as the favourite to succeed Jaap Vink as chairman of the board at the company.
